tv Anderson Cooper 360 CNN July 6, 2012 5:00pm-6:00pm PDT
america the fourth continent for your trip. it is a crucial to give a moving speech about america's hemisphere and friends and future there. and the best part about this advice is not only i did get you more countries and one continent and all in one direction instead of the bounce around thing that you're doing. my advice is free. "ac 360" starts now. welcome, everyone. tonight, a keeping them honest special. an investigation into charity cheats. when you open your heart and your wallet to help a charity, how do you know your money will be put to good use? in the next hour, we're going to bring you drew griffin's investigation of the charities accused of collecting millions of dollars in donations and not spending it where donors expect it. one of the charities under scrutiny is called the disabled veterans national foundation. that's their logo, looks very official. dvmf. there is no sign that any of the cash donations, $56 million they have raised over three years,
went directly to the men and women who sacrificed so much in war zones, not one dime. because of drew's reporting, the senate finance committee is demanding answers from the dvmf. more on that tonight. drew also uncovered yet another veterans charity called the national veterans foundation, which is taking donations, but using only a very small percentage to actually help vets. there are also charities that claim to help abandoned animals but the money trail leads somewhere else. baghdad pups, as far as we can tell, they don't do that at all. the montreal spca, canadian charity that helps abandoned cats and dogged received $13 million in donations over three years, but they ended up in the hole more than $4.5 million. now, all of these charities have one thing in common. they all have connections to a fund-raising company called
quadriga art. they get paid to build mailing lists for the charity groups and that's where the money trail took drew. following the trail was one thing, getting answers was another. >> hi, how are you? >> we're not going to be doing anything on camera. >> so the bottom line is you're not going to give me an interview? where is the money going? i'm trying to reach mr. shoeloff. oh, he's not in. so here is the question raised over three years and none of the money has gone to any veterans, ma'am? >> you think if the money was going where they said it was going, everything was on the up and up, you would think they would want to be completely transparent, right drew has been investigating this for years in some cases and they're refusing to answer, literally getting doors slammed in his face. you'll see what he and his producer uncovered during their continuing investigation. later on, we'll tell you what you need to look for in order to make sure that a charity that you want to donate money to, to
make sure they're doing the right thing with your donations. we begin with the veterans charity that has a lot of explaining to do. a lot of americans feel duped after learning the money they donated in the name of helping disabled veterans never made it to those in need. here is drew's report. >> reporter: mary alice, a retired english professor, is charitable, especially to groups supporting disabled veterans. it didn't surprise her when she opened her mailbox one day and found this. with your husband's name on it. >> mm-hmm. >> reporter: in the fund-raising industry, they're called guilt packages. and when this one arrived, a big calculator, and a calendar book with her husband's name on them, mary alice felt the guilty tug to make that donation. >> and see, it is sort of disabled american veterans, how many people are going to look at it and think they are the same organization. >> reporter: and they're not. >> no. >> reporter: in fact, the gifts were not from the well known and respected disabled american veterans, but from a newer much
smaller charity, the disabled veterans national foundation. something didn't smell right, so this retired english teacher did some research and found that the dvmf gets an f from a charity watchdog group, according to its tax filings, raising nearly 56million in donations, for veterans in the past three years, but according to the records cnn found, none of that $56 million has gone to direct services for veterans. >> making lots of money off of it. i mean, you're talking millions of dollars that people are doing by grabbing money from people who don't have it. >> reporter: who believe out of the goodness of their own heart that they are giving money to -- >> a worthy cause. >> reporter: the purpose is to try to explain to me why these numbers don't add up. cnn has been trying to reach the disabled veterans national
foundation off and on for nearly two years. public relations man did return our phone call, outside the group's washington, d.c. headquarters in 2010. but the manager refused to talk. despite e-mails and more phone calls, our repeated requests for interviews were all denied. >> up to $2 billion is raised in the name of veterans in this country and it is so sad that a great deal of us waste hundreds of millions of dollars of our charitable dollars intended to help veterans is being squandered and wasted by opportunists and individuals and companies that seek -- see it as a profit-making opportunity. >> reporter: daniel borochoff runs a charity watchdog group out of this office in chicago. he grades charities on just how much good and bad they do with your donations. veterans and military charities are some of the worst, he says. and that includes the disabled
veterans national foundation, which he gives an f. because hardly any of the donations make it to the people the group is fund-raising for. so back to that $56 million the group has raised. if it hasn't gone to direct contributions to veterans, where exactly did it go? >> as far as we can tell, up to the tenth floor of this manhattan office building to a company called quadriga arts, a company that specializes in fund-raising. and as far as we know, they know a lot about fund-raising for itself. it is a private company which according to its website raises money for more than 500 charities and nonprofits worldwide. in an e-mail to cnn, a company spokesman says, it, quote, does not discuss specific client relationships. but that spokesman did saeed quadriga at times chooses to invest money in partnerships
with nonprofit organizations. to date, quadriga told cnn it is actually lost $7 million investing in veteran nonprofit organizations. that may be true, but in the case of the disabled veterans national foundation, according to tax documents, not only did all the nearly $56 million in cash donations go to fund-raising costs, but the dvnf still owes its fund-raiser another $5 million. it sounds like backward math. dvnf is reporting on its tax returns that it is costing more than a dollar to raise a dollar, despite the fact that its fund-raising contractor quadriga says it wins its fair share of business because it is a low cost provider in the nonprofit marketplace. >> it is like printing money. they just -- they print the solicitations, they send them out to millions of people. they don't care -- they don't care about the -- the percentage
return. all they care about is how much money they get from it. >> you're the one from cnn. >> reporter: meet priscilla wilkowitz. we found her at a small vfw office in baton rouge, louisiana. >> this is a veterans of foreign wars and i didn't think you would do something like this. and we have agreed to talk to you, answer any -- >> reporter: nobody agreed. so here is the question, raised over three years and none of the money has gone to any veterans, ma'am? while she is the former national legislative liaison for the veterans of foreign wars, it is another veterans group she's president of that we wanted to discuss. okay, so the bottom line is you're not going to give me an interview. cnn has been trying for two years to get an interview with the disabled veterans national foundation, since we began tracking its fund-raising. we have gotten angry phone calls, angry e-mails, promises of written responses, and now a slammed door. ma'am? but no answers. and when you see just how this
charity operates, you'll understand why. >> we're paying down our startup costs. >> reporter: on the organization's website, she likes to boast about the charitable gifts that her group gives away. and dvnf does give away stuff. stuff, actual veterans groups say they really don't need. it is called gifts in kinds on tax forms. instead of giving away some of the $56 million in cash raised over the past three years, dvnf gives away stuff it got for free. in 2010, the group filed this tax form claiming it provided more than $838,000 in gifts in kinds to u.s. vets, a charity in arizona. u.s. vets showed us what actually was sent. 2 20 pair of men's football pants, more than 100 chefs coats, 125 chefs aprons, a needle point designed pillow case, two pages
worth of stuff the director told us we don't need. and take a look at what showed up at the saint benedict's veterans center in birmingham, alabama, where j.d. simpson takes homeless vets off the streets. simpson says the modest shipment included some useful items. 2300 disaster blankets, good for a couple of days' use, and some cleaning supplies. but it also included this. >> sent us a 2600 bags of cough drops, and 22 hundred little bott bottles of sanitizer and 11,520 bags of coconut m&ms. and didn't have a lot of use for 11,520 bags of coconut m&ms. >> reporter: here is what the dvnf posted on its website about the work they were doing in alabama. >> we send, by the truck load, items that these centers and shelters say they need desperately. >> for our veterans who have given so much to our country and now need our help --
>> great sound bite. >> reporter: godid they ask you what you wanted? >> no, they say you have a truck load coming. >> the stuff on the top is what came in on the last truck, the lotion, some hand sanitizer. >> reporter: it is unpacked. >> it is unpacked. >> reporter: because they don't -- >> we have no use for it. these shelves should be filled with this. >> reporter: food. >> not that. >> reporter: do you ask yourself, well, where is the money? >> i ask myself that after i ask myself what the heck are these people doing stealing from our veterans because that's what they're doing. i don't care how you look at it. these people have sacrificed for our country. and there are some people out there that are raising money to abuse them and that makes me mad. >> reporter: executive director j.d. simpson became even more angry when these showed up. more than 700 pairs of surplus
navy dress shoes. >> not a lot of use for these unless you send a person to inspection. >> reporter: those shoes are part of the yard sale that this group uses to raise real funds for the things they really need, not shoes like these. here is the question -- priscilla wouldn't tell us why she sent homeless vets in alabama shiny new navy surplus shoes. >> hello, i'm priscilla, president of the disabled veterans national foundation. >> reporter: dvnf really wouldn't tell us anything. but the group and its president continue to tell you the american public is to keep sending in those donations. >> drew this is really unbelievable. who you does this charity get away with this? how can they take this money and not give any of it directly to the people they say they're collecting it for? >> i think part of our mission here is if people who donated actually saw where their money was going or not going, all going to a private company, in fact, that this fund-raising services business operates, i don't think they would get away with it.
legally, though, there doesn't seem to be much policing of these groups, but for the nonprofit watchdog groups who rate this charity specifically, as an f. >> and all the money seems to be going directly to the company which is raising the funds. is that their business model, simply raise money for themselves? >> you know, that seems to be the bottom line. what we have been told in e-mails from this company is that the goal is maybe not to collect money, but to go to vetera veterans, but to build a sustainable database of names to be used for the future. quadriga has been successful of taking this startup charity and getting a mailing list to work with. but no real money for the actual disabled vets, just a big mailing list. >> it is unbelievable. we'll continue on this. we're on facebook, follow me on twitter @andersoncooper. up next, drew tries to get answers. what happened to the $56 million that they raised. he tracked down the vice
president of the group. we'll see what she told him next. the freedom you can only get from hertz to keep the car you reserved or simply choose another. and it's free. ya know, for whoever you are that day. it's just another way you'll be traveling at the speed of hertz. homicide of young people in america has an impact on all of us. how can we save these young people's lives? as a police chief, i have an opportunity to affect what happens in a major city. if you want to make a difference, you have to have the right education. university of phoenix opened the door. my name is james craig, i am committed to making a difference, and i am a phoenix. visit phoenix.edu to find the program that's right for you. enroll now.
sven's home security gets the most rewards of any small business credit card! how does this thing work? oh, i like it! [ garth ] sven's small business earns 2% cash back on every purchase, every day! woo-hoo!!! so that's ten security gators, right? put them on my spark card! why settle for less? testing hot tar... great businesses deserve the most rewards! [ male announcer ] the spark business card from capital one. choose unlimited rewards with 2% cash back or double miles on every purchase, every day! what's in your wallet? here's your invoice.
we'll have more information coming up on how you can identify what charity is actually using the money that they raise wisely. we'll have more of what drew's investigation uncovered as well. but first, a "360" news and business bulletin. >> secretary of state clinton today accused russia and china of standing up for syria's brutal dictatorship. one opposition group claims as many as 73 people were killed there today alone. confirmation as well that a leading syrian military commander has defected. a "360" follow-up, a newly
released document reveals that just three days before florida a&m drum major robert champion died in the hazing incident, school officials recommended the ban be suspended due to hazing problems. george zimmerman is out of jail tonight. he can't have a bank account, get a passport, or even step inside an airport. his original bail in the shooting death of trayvon martin was revoked after the judge said he lied about his finances. the u.s. economy added only 80,000 jobs in june. unemployment rate remains at 8.2%. and temperatures topping the century mark all across the midwest today, with the heat wave spreading east tomorrow. heat indexes expected to touch 110. more of our special report "charity cheats" after the break. i'm feeling a very strong male spirit present. it's the priceline negotiator. >>what? >>sorry. he wants you to know about priceline's new express deals. it's a faster way to get a great hotel deal without bidding.
more now for the group that claims to be raising money for disabled veteran veterans. is it sounds like a great organization. but what drew griffin uncovered it going to make you very, very angry. they have an official looking seal, right there, and they raised an awful lot of money. you've maybe gotten a mailer from them. as drew report before the break,
according to their own tax filings, they have raised more than $56 million in the past three years. $56 million. now, that kind of money, you would think there would be a lot of disabled veterans who they help directly. you would think they would want to show off exactly where that money has gone, right? that is not the case. drew griffin joins us again, also with us cnn senior legal analyst jeffrey toobin. did you get any idea of where the money is going? >> no, the answers are very vague. we went to sacramento because precilla wilkewitz, the woman who slammed the door in my face, was going to be a presenter at a conference. she abruptly did not show for the conference. so we found the vice president, she did answer our questions, but really without answering anything specific. >> i'm here asking actual questions from your donors and our viewers who want to know what happened to that $56 million they thought they were giving to actual deserved veterans. >> well, the cost of
fund-raising is high, as you know, and it has been for many veteran service organizations who use this kind of direct paying approach. >> what is the point of a fund-raiser when all of funds go to your private fund-raising company? >> well, not all of the funds do. >> well, according to the documents we've seen filed by your organization, they all do and more. $56 million, plus your other seven million. >> i think you need to talk to our washington, d.c. office. >> quite frankly, i've been trying for two years to talk to them and haven't gotten any answers, which is why i have to resort to this kind of nonsense. >> well, i'm a volunteer on the board. >> are you concerned about how this fund-raising drive has gone with your private fund-raiser? >> no, we have done nothing illegal. >> i know you have done nothing illegal, but have you done -- would you like to have more money going to the veterans or some money going to the veterans? >> absolutely there is money going to the veterans. we approve grants to individual veterans and veterans
organizations on a monthly basis. >> i've seen no evidence of that other than some gifts in kind programs. >> it is really infuriating that she's -- first of all, she falls back on the, well, i'm just a volunteer on the board. they're not being transparent. they're not being up front here. they're saying they have done nothing illegal, but that's not the issue here. she claims money is going to veterans and veterans groups. have you been able to find any evidence of that? >> no, we have been looking, anderson, at this group's paperwork, that they file with the irs. the lists of what they have to show the irs to find any evidence that any actual dollars are going to veterans groups. we have also been begging them to open up other books to show us any proof it is happening. we simply cannot find it. plain and simple, they have not been able to come up with one documented piece of evidence that shows us, yes, here is money that was donated, and here it goes to the veterans who need it the most. >> what is so sleazy about this,
after that interview, you would assume, well, if they actually did have money that they were giving every month to veterans groups, after you confronted that woman on the board, that you would have gotten a call the next day and they would have said, look, here is -- here is all the documentation, here is where the -- exactly where the money is going. they haven't done that. we have been on them for months, you've been on them for years and they have yet to really give a sit-down interview. i find that -- if they're doing nothing wrong, if they're being transparent and asking for people for money, they should sit down and do an interview and explain if they can, apparently they're completely unwilling to do that. >> yeah, and what you'll hear from the watchdog groups is good fund-raisers do just what you say, anderson. they have nothing to hide. >> and, drew, she's saying, as you know, fund-raising is expensive. it is expensive when you sign up with quadriga art apparently. what you found is this $56 million they raised has gone back to quadriga art and the only thing they have gotten for it is a bigger mailing list so they can raise more money down the road. >> a bigger mailing list and a
bigger debt to quadriga art. this group is in debt now to their fund-raiser. it is expensive is one thing. but to go in debt to a fund-raiser, they're actually taking more than a dollar to raise a dollar. >> as a board member, did you have any idea that the costs were this high? $56 million would be paid for just to get a list of people. >> we did not know how fast this would take off and how well it would do. >> how can you say how well it could do when the money is going to quadriga. >> when we started this, we didn't know how fast it would take off. >> you're basically taking money that people want to go to veterans' pockets and giving it to a private company. >> it is worth it for every veteran that we can help. >> no matter what the cost? >> well, i put on women's veterans conferences in my home state, and we spend several thousands of dollars, and they
are donated dollars, and my philosophy, my personal philosophy has always been that if we can help one veteran, then every dollar we spend is worth it. >> even if it's $56 million. >> well, i'm not going to answer that question. >> you know what, i'm sorry, if you can only help one veteran, and you've raised $56 million, shame on you. that is the biggest cliche -- if i can help one person, you know. it sounds good if it is like the results of a bake sale, but if you raise $56 million and only help one person, is this legal? >> well, you know this is an amazing area of the law frankly i didn't know much about. but, unfortunately, charity scams are not new. and states have tried to regulate them over the years, north carolina certainly made an effort in this area. and what the supreme court has said is that charitable requests are protected by the first amendment. that it is very hard to make scam charities illegal. as long as they fill out their
paperwork correctly, as long as they report honestly to the irs, we raised $56 million, and it costs us $56 million, as long as that's true, as it appears to be true here, there doesn't appear to be any criminal offense involved. >> it is infuriating because maybe it is legal, but it just seems incredibly deceptive and also i don't know that woman is just naive or stupid or deceitful, i'm not sure which of those things, or just embarrassed to admit that she's in over her head, but for her to be backing up, raising $56 million, that has all gone to this company and they're now in the hole to this company still. >> right. i think all those adjectives might apply to her. but let's concentrate on where the money goes and who is making money here. quadriga doesn't even pretend to be a nonprofit or a charity. quadriga is making an enormous amount of money by churning these charities, these charity lists. that's where the money goes. they're the people making money.
this woman, she strikes me as she's probably well intentioned, but she's obviously in way over her head here. the problem is quadriga, not the charities. >> and how the people sleep at night just -- >> it is grotesque, but they're going to be sleeping in their own beds, not in prison, because the law really does protect them. >> very high thread count sheets, no doubt. we're going to have more on quadriga later in the program. jeff, appreciate it. drew, stick around. a look at another charity drew investigated, millions of dollars donated to a group called baghdad pups, supposedly helping military dogs abandoned in iraq and afghanistan. why are pennies on the dollar going to help any animals and the group admits it hasn't rescued a single military dog yet. you will not believe what drew has uncovered. why not make lunch more than just lunch? with two times the points on dining in restaurants, you may find yourself asking
why not, a lot. chase sapphire preferred. there's more to enjoy. i bought the car because of its efficiency. i bought the car because i could eliminate gas from my budget. i don't spend money on gasoline. it's been 4,000 miles since my last trip to the gas station. it's pretty great. i get a bunch of kids waving at me... giving me the thumbs up. it's always a gratifying experience. it makes me feel good about my car. i absolutely love my chevy volt. ♪
i absolutely love my chevy volt. this is new york state. we built the first railway, the first trade route to the west, the greatest empires. then, some said, we lost our edge. well today, there's a new new york state. one that's working to attract businesses and create jobs. a place where innovation meets determination... and businesses lead the world. the new new york works for business. find out how it can work for yours at thenewny.com. mine was earned off vietnam in 1968. over the south pacific in 1943. i got mine in iraq, 2003. usaa auto insurance is often handed down from generation to generation. because it offers a superior level of protection, and because usaa's commitment to serve the military, veterans and their families
is without equal. begin your legacy, get an auto insurance quote. usaa. we know what it means to serve. welcome back. we're spending the hour looking at charities taking your money and as far as we can tell, not delivering on their promises. in some cases, not even close. it is important information. but the last thing we wanted to do is gift impression that all charities are bad or you shouldn't give it all. that would be terrible. in a moment, we'll talk with the leaders of two groups that track nonprofits. they're going to share with you what you should do to make sure your donations go to good use. how you can check up on a charity basically. after all, when you're generous and want to do good and help people and want to make sure you're helping someone in need. before we do that, though, we want to take a look at one of the charities you saw in drew's earlier report, a charity doing really heroic work helping veterans. here again is drew griffin.
>> reporter: he's gotten candy, cough drops and hundreds of pairs of shoes he didn't need, or ask for. now j.d. simpson has a message for those who want to help him support the small veterans shelter he helped found three years ago in birmingham, alabama. >> everybody is saying, hey, let's help the vets, it is like the flavor of the day. don't say you're going to do it. do it. >> reporter: simpson and his buddy founded the saint benedicts veterans shelter with almost no money. they struggle every day to keep it open. mission, simple, helpless vets get help. hungry vets get food. homeless vets get shelter. three huts and a cot is what they call it. for three years, the only real struggle to keep the mission going is money. >> on my budget, $200,000 this year, and that's just to keep gas in the van, pay the insurance and buy food. that's not a salary for anybody that works here. we're all volunteers. >> reporter: on the shelter's
front porch, he recalls the day a veteran in a wheelchair showed up. >> we had a veteran one day here in the rainstorm with no way to get up into the house. we picked him up and carried him in here and they came by within a week and put in a ramp. >> reporter: since that day, the charity, the disabled american veterans, has sent simpson $400 every month for gas, not coconut m&ms. >> we don't need no astronomically silver bullet. we need people pulling together saying let's do something about this. let's get off the freaking sound bites, and get in the streets. >> reporter: saint benedict's is tiny. both simpson and his friend rich say it does the job, taking homeless vets off the street. >> do it all again too. >> in a heart beat, we really would. there is enough success stories out there, enough. we're not going to tahiti in our retirement. but it feels good know iing wha
we're doing. >> reporter: drew griffin, cnn, birmingham, alabama. up next, drew griffin on the money trail, looking at charities claiming to do good things with your donations, helping those in need, but that is not the case. the postal service is critical to our economy, delivering mail, medicine and packages. yet the house is considering a bill to close thousands of offices, slash service and layoff over 100,000 workers. the postal service is recording financial losses, but not for reasons you might think. the problem ? a burden no other agency or company bears. a 2006 law that drains $5 billion a year
from post office revenue while the postal service is forced to overpay billions more into federal accounts. house bill 2309 is not the answer. throughout our entire lives. ♪ one a day women's 50+ is a complete multi-vitamin designed for women's health concerns as we age. ♪ it has more of seven antioxidants to support cell health. that's one a day women's 50+ healthy advantage.
welcome back. continuing our investigation into charities that collect millions of dollars of donation from well meaning people around the country, but ended up spending very little if any of that money actually helping anyone, except for themselves. so far we told you about the $56 million raised by the disabled veterans national foundation over three years. none of that money, none of it that we can find, has gone directly to help veterans. the million dollar question is, where is all the money going? >> as far as we can tell, up to the tenth floor of this
manhattan office building to a company called quadriga arts. a company that specializes in fund-raising. and as far as we can tell, quadriga arts knows a lot about fund-raising, for itself. >> the company again is called quadriga arts. they provide mailing lists to groups like dvnf. but drew had trouble getting answers to what it has been doing with all the money. watch. >> reporter: yeah, it is drew griffin, griffin. >> he is not here. >> reporter: i'm trying to reach mr. shoeloff. oh, he's not in? >> as we mentioned, drew's reporting on the disabled veterans national foundation caught the attention of the senate committee. the committee is requesting records relating to their fund-raising and marketing activities. i spoke with senator max bachus,
the chairman of the committee. >> what concerns you most about this disabled national veterans foundation? >> it sounds like it is a front. i don't think it is legit. they take about $56 million from ordinary good americans who want to help veterans, but then don't give any money to veterans, and in this case, don't give any money to disabled veterans. it is an outrage, frankly. >> have you heard about the dvnf before? >> i have not, frankly. you highlighted it in one of your reports. >> senator max bachus giving a nod to drew griffin's reporting. dvnf, that is not the only group that drew has been covering. there is another group that has a similar losing connection to quadriga arts. the group is baghdad pups, they raised millions of dollars to raise military dogs with u.s. troops and others they serve overseas. that's the idea. as far as we can tell, they don't do that at all. once again here is drew griffin.
>> reporter: in montreal, like every big city, the needs at the local aspc are great, dogs and cats need help and the money to help them is running out. in 2005, what seemed like a great opportunity came knocking. a private fund-raising company called quadriga arts proposed a major expansion. montreal's spca would become the canadian spca and kaud rileag q would send fund-raising mailers all across canada. the money started rolling in but there was a big problem. practically every dollar that came in, according to the new executive director, was going into the coffers of quadriga arts. the fund-raising bills so large that after three years, the montreal spca, despite receiving about $13 million in donations, was in the hole more than $4.5 million. how do you get in debt to a
fund-raiser? >> by incurring expenses and not having a plan for getting out of it. it was not a smart decision on the spca's part. and we let quadriga create strategy for us. >> reporter: the strategy was simple, quadriga art would send out pleas for money on behalf of this shelter, including tote bags and other gifts made by quadriga art's chinese factory. but the costs far exceeded the donations and the spca was locked into this contract for seven years. the fund-raising operation was so upside down for the montreal spca, that they actually still owe quadriga art nearly $2 million, and quadriga has even taken out a lien on this animal shelter. that's a lot of money. >> it is a lot of money. it is a lot less than the $4 million we owed them seven years ago. >> reporter: quadriga art and its president, mark schulhoff
have refused interview requests to explain its unique process of raising money. public relations firm explained the cost of beginning and raising funds by quadriga involved long-term strategies to develop donor lists, creating databases that would eventually pay off. the spokesman told us, this, quote, has been a proven model for 50 years, despite being criticized by some charity watch groups. at the montreal spca, where the quadriga art contract has been running for nearly seven years now, the results have been a disaster. will you sign with them again? >> probably not. >> reporter: that is hardly the end of this story. my name is drew griffin. i'm with cnn. >> yes. >> reporter: meet pierre barnotti, fired by the montreal spca, only to emerge as the founder of a new charity, spca international. from a rarely staffed office in
new york, barnotti and quadriga art designed a new charity, to tug on the heart strings with its signature program called baghdad pups. the stated goal, reuniting vets and their war pets. the televised appeal with an unwitting former military dog handler on cnn's sister network hln in 2011 was heart warming. >> our salute to the troops today is live in the studio with retired army sergeant jerry barnes who has nugget with him, and then sitting right beside nugget is terry, with the spca, and ivy is down at my feet. >> reporter: terry crisp, with spca international, was telling our viewers, ivy and nugget were two bomb sniffing dogs that worked for a u.s. contractor in iraq and had been essentially abandoned by the company. she rescued them and was trying to find them homes. and hln anchor robin meade
understandably couldn't believe it. >> how do they fall through the cracks and get stranded there? that's unthinkable to me. >> it is unthinkable. that's why spca international is making sure these dogs don't get forgotten and they get brought home. >> reporter: it turns out, ivy and nugget weren't abandoned at all. it also turns out the person telling us so, terry crisp, has been accused in similar situations before, begging for money to save animals that weren't being saved. the military contractor in iraq actually says ivy and nugget had been retired and the company had found them good families who were going to adopt them in kurdistan, good homes. that's when terry crisp came along and asked if the dogs could be donated to spca international. the contractor agreed. but terry crisp didn't tell the viewers that. what she did tell us is if we just gave her money, spca international would be doing
something few americans could resist, saving the pets of our iraq and afghan vets. and that's where peggy comes in. when this showed up, what did you think? >> to be honest, when this showed up, i opened it up, this is what i saw, i thought this was fantastic. i was on board because i thought, saving animals and supporting the troops, you know, what two things could be better? >> reporter: what peggy got in the mails with a plea from the spca international and operation baghdad pups. a direct mail package from the fund-raising powerhouse quadriga art, the guilt package, as they are called in the business, included this t-shirt, a tote bag, and letters of thanks. peggy decided to do a little research. >> six cents out of a dollar, approximately would have gone to actually saving soldiers' pets. >> reporter: that's what you figured out? >> yes, based on what they spent in 2010 on the operation baghdad
pups. >> reporter: in fact, according to these irs tax filings, spca international has taken in more than $26 million in donations over the past three years. $23 million of that money has gone right into the coffers of the direct mail company quadriga art. and spca international is still in debt to quadriga art, another $8.4 million. what's worse, the spca international admits it hasn't rescued any military dogs, just 26 contractors' dogs including ivy and nugget. the bulk of the animals the group claims to have saved, a total of 477, have been strays befriended by the troops. $26 million to rescue less than 500 pets? how is that possible? that's what we wanted to ask the group's founder, pierre barnotti, who lives in montreal. i'm wondering what you can tell us about the value of the donors, where is the money
going? >> well, we have different programs and the site covers it all. again -- i'm not trying to hide or avoid any questions. but we have a spokesman, she has all the answers ready for you. she has agreed to give you an interview. >> reporter: can you just tell us how? >> absolutely. all you to do is go on spcai.org. >> reporter: we did that. and asked bob, the president of the charity watchdog group guidestar, about the documents we found. >> what worries me about this one is that the numbers don't compute. i can't understand how to connect the dots between how much money is spent on fund-raising, to how much money is spent on programming, and what the sources of those revenues are, and i also can't really measure the impact of this organization. what difference are they really making? >> reporter: a spokesman for
spca international told cnn by e-mail that, yes, although our investment is not being returned in the time frame we had projected, the investments will pay for themselves within just a few more years. peggy scolley admits it is successful, but the vets and their pets and anyone who gave money, she says, were duped. >> what is frustrating is that it is millions and millions of dollars that just go to a business, a for profit business. it is not going to charity at all. >> drew griffin joins us again. drew, you weren't able to track down this woman terry crisp who brought those dogs into the hln studios. where is she? >> we're told she's in thailand and supposedly that makes her unavailable. but there is something else we learned after digging into terry crisp and her background. she's done this before. after hurricane katrina, crisp staged media campaigns asking for donations to save pets,
stranded by that storm. and she actually collected $8 million for this charity called noah's wish. well, guess what, the state of california, where that noah's wish was registered, they began investigating to see if any of the $8 million actually saved any katrina pets. the investigation ended with a settlement, the agreement was o noah's wish returned half the money, $4 million, and made a promise that terry crisp would not be an officer, director or trustee of any charity for five years. we called up the state of california and they are now investigating to see if terry crisp violated that agreement. >> this isn't fair. i remember this woman, after katrina. we did a profile of her on our program, she told us she was saving thousands of dogs. is there any evidence she saved any? >> according to the state of california attorney general's office, that settlement agreement finds only some money went to program services, and specifically, anderson, overhead. there is nothing that says even a single pet was saved from hurricane katrina.
and now this woman is going around again telling us we need it give her money to save stray animals now in iraq and afghanistan. >> again, if these people are on the up and up, they would want to clear their names and they would come for an interview. they're claiming she's in thailand and unavailable. i've lived in thailand, there is plenty of phones. they got internet connections, quite good ones. she could reach out, she could try to answer some questions. it is absurd. drew, appreciate you staying on it. amazing reporting. up next, after seeing what drew uncovered, chances are you're wondering how can you be sure a charity is doing the right thing with your donations. that's an important question. we're going to get tips from the leaders of two groups who track charities. brain freeze cake donettes rolling hot dogs bag of ice anti-freeze wash and dry diesel self-serve fix a flat jumper cables 5% cashback signup for 5% cashback at gas stations through september. it pays to discover.
until i got a job in the big apple. adjusting to city life was hard for me. and becoming a fulltime indoor cat wasn't easy for atti. but we had each other and he had purina cat chow indoor. he absolutely loved it. and i knew he was getting everything he needed to stay healthy indoors. and after a couple of weeks, i knew we were finally home! [ female announcer ] purina cat chow indoor. always there for you.
in here, every powerful collaboration is backed by an equally powerful and secure cloud. that cloud is in the network, so it can deliver all the power of the network itself. bringing people together to develop the best ideas -- and providing the apps and computing power to make new ideas real. it's the cloud from at&t. with new ways to work together, business works better. ♪
yoyou u wawalklk i intna coconvnvenentitiononalal ms ststorore,e, i it't's s rert ababouout t yoyou.u. ththeyey s sayay, , "w"weleu wawantnteded a a f firirm m bebn lilie e onon o onene o of . wewe p prorovividede t thet inindidivividudualalizizatat yoyourur b bodody y neneede. wowow,w, t thahat t fefs rerealallyly g gooood!! ononcece y youou e expxpere, ththerere'e's s nono g goio. huhurrrry y inin n nowow fr lolowewestst p pririceces s of. sasaveve $ $30300 0 toto $n seselelectcteded s sleleepep n . fifinanal l dadaysys!! sasalele e endnds s susundn. ononlyly a at t ththe e slsleeer ststorore,e, w wheherere n
all this hour, we have been looking at charities promising one thing with your money, doing something else entirely. from veterans to animal charities, promises are not being kept. the bad deeds of a few should not stop you from donating money to those who do a good job with their charities. want to get some tips on how to make sure you're working with a good charity. art taylor is president and ceo of the better business bureau's wise giving alliance. art, are there quick and ease why i ways to check up on a charity? >> sure, the first way is to go to a good information source. we have one at the better business bureau at our website, give.org that evaluates 10,000 charities in relation to 20 best practices that we believe charities should adhere to. >> things like transparency. >> how they're governed, how they manage their finances, you know? how many board members are
actually attending meetings, how truthful are they of their public information materials. >> and, bob you say you should be able to pick up a phone and call any charity out there soliciting money. what basic questions should someone be asking before deciding to donate? >> three simple questions. what does your organization do? tell us in very simple, easy to understand language what do you do? how do you do it is the second question. what are your programs, what are your activities, and then, three, how are you doing? give us some measurable ways to measure the impact of your organization. >> art, had you heard about charities that use these fund-raising companies? that seems like all the charities we have been profiling, that is what seems to have a common link. they're stuck in a contract, maybe they didn't realize what the terms of it were, but they're in the hole. >> fund-raising companies can be a good asset for some charities,
but it is really important that management in the board take control of the situation as bob said. they should really make sure they know what they're getting into. there are fees, of course, associated with using those firms and that's fine. but the vast majority of the money should go to the charity, not to those firms. and some charities that don't have household names will get a pitch from a fund-raising company, which will say to them, you don't have to do anything, and we're going to bring you money. well, they will bring you a little bit of money, but you really are going to upset your donors because in the end, most of that money is going to stay with the fund-raising company under an arrangement like that. >> bob, the other thing to me that raises red flags is that you would think after all these reports we have been doing, naming specific people and specific charities, that if they were on the up and up and wanted to clarify things, they know where we are. we have an open invitation to any of these folks to come on the program and talk, to talk to drew griffin and there is not --
they're not. it is like they're all running for cover and stuff. transparency is incredibly important, isn't it? >> transparency is the first rule of a successful donation to a charity. you want to know how are you using my hard earned dollars. can you prove to me, charity, that you're being effective, that you're being efficient, that you're really making a difference? and i think it is -- it is something we expect today, in today's charity world, that every organization needs to be transparent and they need to be accountable. >> art, are there any i was fwa somebody to go back the and see if their money is having the direct impact they hoped? >> we require that charities that meet our standards do that, they should have an annual report that discloses how funds were spent, that talks about how they performed in relation to their mission, that talks about what their plans are for the future.
these are things that every donor should be able to get from every charity. and so we think that, yes, every organization ought to provide that if a donor asks. >> art, thank you very much. appreciate all you do and bob as well. thanks. we'll be right back. producers are committed ns to safely and responsibly providing generations of cleaner-burning energy for our country, drilling thousands of feet below fresh water sources within self-contained well systems. and, using state-of-the-art monitoring technologies, rigorous practices help ensure our operations are safe and clean for our communities and the environment. we're america's natural gas. you know what's exciting? graduation. when i look up into my students faces, i see pride. you know, i have done something worthwhile. when i earned my doctorate through university of phoenix, that pride, that was on my face. i am jocelyn taylor. i'm committed to making a difference in people's lives,